Boeing signs $3 billion deal with Iran, a first under Trump
TEHRAN | Boeing Co. has signed a $3 billion deal with an Iranian airline for 30 new aircraft, officials said Tuesday, in the first major sale by a U.S. company in the Islamic Republic since the Trump administration imposed new sanctions against Tehran.
The deal for the 30 737 MAX aircraft, which includes an option for another 30, could force President Trump to choose between two major campaign promises: taking a harder line against Iran or expanding markets for American manufacturing jobs.
The new agreement comes on top of the $16.6 billion sale Boeing previously made in Iran following the landmark nuclear deal struck under the Obama administration with Iran and five international powers. Mr. Trump long has criticized the atomic deal, though he toured a Boeing plant in February and touted the firm’s work as proof of a coming American manufacturing renaissance.
“On the one hand, there’s the attraction of jobs and export orders for American goods. On the other hand, of course, they were elected partly on the promise of getting tough on Iran,” said Richard Aboulafia, an aircraft analyst and vice president of analysis at the Virginia-based Teal Group. “They’ll have to make tough decisions.”
Chicago-based Boeing struck the deal with Iran’s Aseman Airlines, a firm owned by Iran’s civil service pension foundation. Aseman, Iran’s third-largest airline by fleet, flies domestic and international routes.
Aseman spokesman Amir Reza Mostafavi told The Associated Press that the deal came following several round of talks with Boeing over the past year. He said the firms signed the deal March 18 and the first aircraft will be delivered in 2019. Boeing said the first delivery would be in 2022.
The European Union blacklisted Aseman in December because of safety concerns, many related to the fact that Iran modernize its fleets while under international sanctions. The airline did not operate flights to European destinations at the time.
Less than a week after that decision, the airline sealed a deal to lease seven planes made by European manufacturer Airbus. Those aircraft are expected to begin arriving next month.
The new Boeing deal was made possible by the nuclear agreement reached between Iran and world powers. Boeing struck a December deal with Iran Air, the country’s flagship carrier, for 80 passenger planes worth $16.6 billion. Iran Air also will lease 29 new Boeing 737s.
In January, Iran Air signed agreements to buy 118 planes from Airbus, estimated to be worth some $25 billion. Asghar Fakhrieh Kashan, a deputy transportation minister, later said Iran would cut the number of Airbus planes to 112.
Washington granted permission for Boeing and Airbus to make the initial sales in September. Both manufacturers needed the approval of the U.S. Treasury for the deal because at least 10 percent of the airplanes’ components are of American origin. The Treasury similarly would need to approve the latest deal.
Home to 80 million people, Iran represents one of the last untapped aviation markets in the world. However, Western analysts are skeptical that there is demand for so many jets or available financing for deals worth billions of dollars.
Another wild card is U.S. politics. Mr. Trump has threatened to renegotiate terms of the Iran deal, while some lawmakers have suggested putting new sanctions in place and criticized Boeing for selling aircraft to Iran. House Financial Services Committee Chairman Jed Hensarling cautioned U.S. banks about participating in the contract and noted that the deal was advancing on the same day Syria, Iran’s ally, stood accused of a chemical attack on rebel positions in that country’s civil war.